International News

Cuba Begins Experimenting With Capitalism, or Something Vaguely Resembling It

Cuba may have a bustling black market of underground entrepreneurs, but legal private enterprise has been outlawed since all businesses were nationalized in 1968. Now, according to Reuters, the communist island is about to embark on an experiment with something resembling capitalism.

The government has begun leasing some small-scale retail services back to state employees. In one example, 30 taxi drivers in El Cerro, Havana, have leased their cabs. They pay 595 convertible pesos for the car, 39 convertible pesos a month, and 40 pesos a day. They're responsible for gas and can buy parts from the state, but all other money is theirs to keep.

"Overall, the drivers are happy. There is still control over what we charge, but we are freer and earning more," one veteran driver told the newswire.

After a review in June, the program could be extended to other taxi dispatch offices in the country.

A similar experiment with beauty salons might begin in central Havana. Hairdressers could be allowed to rent the shops as a cooperative and are free to charge whatever they want based on supply and demand, but they must pay taxes.

Currently, hairdressers must charge state-controlled prices even though supplies provided by the state come in irregularly, so many smuggle in marked-up supplies from places such as Miami and Spain.

"The government is simply accepting what already exists, adopting new structures to legalize what was before viewed as theft and instead of spending a fortune on useless bureaucrats has begun collecting taxes," an anonymous local economist said.

While it's unlikely Raúl Castro will lead his country to full-on capitalism, it seems Cuba is finally realizing the failures of communism and looking to improve them by borrowing a bit from a freer system.

[Reuters: Cuba experiments with private retail enterprise]

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Kyle Munzenrieder